OPEX & CAPEX..

Heard this terms many times here & there!!and got baffeled as to wat it is??
or went through financials of a stock and could not figure out difference between operational & capital exenditure?? :)

Just a simple explanation is below:

OPEX:
i.e. operating expense, operating expenditure, operational expense, operational expenditure

OPEX is an ongoing cost for running a product, business, or system
CAPEX-- Its counterpart, a capital expenditure (CAPEX), is the cost of developing or providing non-consumable parts for the product or system.

For example, the purchase of a photocopier is the CAPEX, and the annual paper, toner, power and maintenance cost is the OPEX.

this is the money the business spends in order to turn inventory into throughput.

On an income statement, "operating expenses" is the sum of a business's operating expenses for a period of time, such as a month or year.


Operating expenses include :
1.accounting expenses
2.license fees
3.maintenance and repairs
4.advertising
5.supplies
6.attorney fees and legal fees
7.utilities, such as telephone
8insurance
9.property taxes
10.travel and vehicle expenses
11.salary and wages
12.raw materials

Capital expenditures (CAPEX or capex) are expenditures creating future benefits. A capital expenditure is incurred when a business spends money either to buy fixed assets or to add to the value of an existing fixed asset with a useful life that extends beyond the taxable year.

Capex are used by a company to acquire or upgrade physical assets such as equipment, property, or industrial buildings. Capex is commonly found on the Cash Flow Statement as "Investment in Plant Property and Equipment" or something similar in the Investing subsection.

Included in capital expenditures are amounts spent on:
1.acquiring fixed assets
2.fixing problems with an asset that existed prior to acquisition
3.preparing an asset to be used in business
4.legal costs of establishing or maintaining one's right of ownership in a piece of property
5.restoring property or adapting it to a new or different use
6.starting a new business